Not all video games are bad per se, but playing them to the point of ignoring all other activities (addiction) is going to mean that the child's development and life experiences will suffer. The same problems can be seen with too much social media or texting.
We countered this by planning ahead and arranging as many interesting/fun physical activities as the weather/surroundings would allow - cycling, climbing, hiking, soft play, football, swimming. Inviting their friends/same-aged-relatives along would reinforce the value of the activity.
After expending a bunch of energy with the kids, it was actually useful for them to be able to play games quietly for a while so we could cook, clear up, do paperwork etc. There are a couple of caveats to this, though:
1) make sure the game-playing is done in the lounge - i.e. not the bedroom. We've found that when children have games/DVD/computers in their bedrooms, the battle becomes about territory rather than the particular activity. If the game is portable, establish a rule that it must be played in the lounge.
2) be sure you know what they're playing; games still need to be age-appropriate and not online.
The single fathers I know have used this technique in combination with a daily routine to keep their children's activities balanced.